Gibson Dunn Partner Named in KPMG Accounting Malpractice Lawsuit

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A partner at the U.S. law firm Gibson Dunn & Crutcher has been implicated in a $50 million accounting malpractice lawsuit filed against KPMG.

Cheryl Justice, the Los Angeles-based partner, has been named in an application for sanctions relating to the lawsuit Targus Group International v. KPMG. The lawsuit, which was originally filed on January 30, 2003, alleges professional malpractice by KPMG.

Targus had alleged that KPMG and its legal counsel intentionally hid and failed to produce "smoking gun" documents relating to its audit and business policies and training programs in effect between 1996 and 2001.

The matter relates to the financial harm suffered by Targus following its former CFO's embezzlement of $40 million between 1997 and 2001.

Targus claims that, had KPMG audited the company's financial statements competently prior to 2001, the company would have been alerted to the embezzlement years before it was discovered in August 2001, thus reducing the financial harm.

The trial is set to begin on September 19, 2005.

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